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Apatzingan - Vigilantes who have challenged the government's authority in lawless Michoacan state held onto their guns on Wednesday as federal authorities struggled to rein in a monster they helped create: citizen militias that rose among farmers and lime pickers to fight a drug cartel.

"They said they're not going to bother us, but they don't want us to keep advancing," said Hipolito Mora, head of the self-defence group in the town of La Ruana. The vigilantes now control the 17 municipalities that make up southwestern Michoacan - about a third of the entire state. "They don't want us to carry our guns in view."

Interior Minister Miguel Angel Osorio Chong denied such an agreement was reached with the vigilantes.

"We made it clear that they cannot be armed," he said, though he said arresting vigilantes was not the objective.

Leaders of the self-defence groups are demanding the government arrest the top seven leaders of the Knights Templar drug cartel before they consider laying down their weapons.

Late on Wednesday, Monte Alejandro Rubido Garcia, executive secretary of the National Public Safety System, said federal police had detained two members of the Knights Templar.

‘Dirty work’

But the spokesperson for the vigilante movement, Estanislao Beltran, said the self-defence groups were not satisfied with the arrests, saying the men weren't cartel leaders.

This week, the government has beefed up federal police numbers in the rich farming region known as the Tierra Caliente, vowing to tame the area that has been controlled for at least three years by the quasi-religious Knights Templar.

But the move comes after months of unofficial tolerance of vigilante groups that have taken up arms against the cartel, which started in drug trafficking and expanded to extortion and total economic control as the government failed to act.

With more firefights and violence over the weekend as vigilantes continued to advance, the tolerance of the armed citizen groups is being called a dangerous precedent inside the country and out.

The US State Department said on Wednesday that the warring between vigilantes and the cartel is "incredibly worrisome" and "unclear if any of those actors have the community's best interests at heart".

"What they created was a Frankenstein that got out of control," Erubiel Tirado, a specialist in civil-military relations at Iberoamerican University, said of the situation, adding that the government has been allowing citizen groups to do its "dirty work".

So far the vigilantes have been more successful than the government, which has been sending troops to Michoacan at least since 2006, when former President Felipe Calderon launched his assault on drug trafficking. When legions of federal police arrived on Tuesday to take over Apatzingan, the farming region's main city and a Knights Templar stronghold, residents simply shrugged.

"Police sent in from outside don't know where the criminals are," said the Reverent Gregorio Lopez, a Roman Catholic priest. "We know of 10 warehouses where they are hiding armed men. They aren't going to find them."

With no clear rules governing the use of the military in civilian law enforcement, soldiers have been slow to respond as the cartel has gone about its business in Michoacan, including taking over some mining exports to China, forcing civilians to demonstrate against police and extorting payments on a wide range of activities.

‘Reckless government strategy’

The vigilantes know who the criminals are, often with help from local residents who point out the thugs who have extorted money, stolen homes and cars, or kidnapped relatives.

The vigilantes kill without qualms and take enemies into improvised jails.

Cartel gunmen usually flee before vigilantes arrive in towns, burning vehicles to cover their escape. In each new town they take over, the so-called self-defence groups are greeted by dozens of eager young men who want to join the movement and "liberate" more towns.

The number of deaths in the yearlong vigilante-cartel conflict is unclear, but the state's homicide count has roughly doubled to more than 100 a month since September compared to earlier in the year.

Federal forces initially arrested vigilantes when they first rose up to take over some towns in February. Authorities called the conflict a fight between drug cartels. But as the vigilante campaign became more successful, federal officials started negotiating with the groups and in October offered to work with them to keep them from attacking Apatzingan.

The military and federal police had been providing patrol and helicopter cover for their campaigns in recent months, and stood by during the weekend firefights without intervening.

When Osorio Chong called on Monday for vigilantes to put down their arms and go home, he got instead a standoff between the military and vigilantes that killed at least two civilians and spurred a human rights investigation.

The vigilantes have the support of locals for now and they have grown stronger and more sophisticated, but many rights activists and legal experts warn that they could simply replace the cartel as a new outlaw authority.

Jose Miguel Vivanco of Human Right Watch called the situation "an improvised and even reckless government strategy".

State and federal government authorities already say some self-defence groups have been infiltrated by the rival New Generation cartel from neighboring Jalisco state, which is warring with the Knights Templar.

Vigilante leaders vehemently deny this. They say they finance their battle with money that citizens formerly paid in extortion to the Knights Templar and now donate voluntarily to self-defence groups. They also say wealthy landowners in the rich farm country, a major producer of limes, avocados and mangos, have been financing their cause.

Vivanco fears the potential for abuse.

"It's not hard to imagine such groups quickly becoming involved in [assuming some haven't already] the very criminal activities - such as extortion and drug trafficking - that the government needs to eradicate," he said in written remarks sent to The Associated Press.

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